Fuel sales from new stores drove Weis Markets’ third-quarter revenue growth, despite softer demand in grocery categories.
“We delivered higher revenue and improved earnings in the third quarter while customers remained cautious with their spending and sought affordability and value,” said Jonathan Weis, chairman, president and CEO of Weis Markets.
The supermarket chain reported revenue of $1.28 billion for the 13 weeks ended September 26, up 3 per cent from $1.24 billion a year earlier. Net income increased 31.4 per cent to $22.2 million from $16.9 million.
The company attributed revenue growth mainly to higher fuel sales and new store contributions. Lower sales in pharmacy, dairy, and produce partially offset these gains.
Pharmacy revenue was affected by about $14.6 million in pricing headwinds from Medicare’s Maximum Fair Price provisions under the Inflation Reduction Act, which took effect in January. The company said the changes reduced total revenue growth by about 1.2 percentage points.
In dairy, lower egg prices compared with the prior year weighed on sales, while produce sales were impacted by weaker customer demand during a Cyclospora outbreak in the third quarter.
Gross profit increased 5.8 per cent to $324.6 million, while gross margin improved to 25.5 per cent from 24.8 per cent a year earlier.
“Our people, process and technology investments continue to enhance customer value and convenience while supporting greater efficiency across our operations, including stores, supply chain, manufacturing and the Store Support Center,” Weis added.
Weis Markets operates 201 stores across Pennsylvania, Maryland, Delaware, New Jersey, New York, West Virginia, and Virginia.
- Further reading: Weis Markets posts top-line growth despite hampered pharmacy sales.
